Free FICO Credit Scores: Options Grow for Consumers

It used to be that your credit score was a well-guarded secret, available only to lenders and banks, which used it to evaluate whether you were likely to pay back a loan. If you wanted to see your score, you typically had to buy it.

But this year, it seems, options are mushrooming for consumers to obtain a free FICO score, the widely used credit score created by the Fair Isaac Corporation. FICO says its scores are used in 90 percent of credit decisions in the United States.

Citigroup this week began making free FICO scores available to all holders of its Citi credit cards on a monthly basis. Customers can obtain the scores online by logging in with their account credentials, or they can request that the scores be mailed. The scores are based on data from Equifax, one of the three major credit bureaus (the others are TransUnion and Experian). The bureaus collect data from lenders and analyze it using FICO’s formulas to distill the information to a three-digit number, generally ranging from 300 to 850.

Chase said it would make FICO scores available “in the coming months” to 10 million holders of its Slate credit cards, and Bank of America said it would offer free scores to cardholders “later this year.” Those banks didn’t provide further details.

Next month, Ally Financial will begin testing a free FICO score program with its car loan borrowers, its largest group of customers, and plans to make it available to all auto loan customers this summer. And Sallie Mae, the big educational finance company, is now making scores available to borrowers of private student loans.

Card issuers and lenders that recently announced plans to offer scores join others that were early adopters of the program, including Discover; First Bankcard, a division of First National Bank of Omaha; and Barclaycard, the United States card unit of Barclays.

Why the increase in availability? Nudging from federal consumer finance officials, combined with an “open access” program that FICO created in 2013, have pushed lenders to offer free scores to consumers who use their credit cards or who borrow money to finance cars or student loans.

Free credit scores have been available from consumer finance websites, but they often are “educational” versions that aren’t necessarily the same as the ones lenders use when evaluating a potential borrower’s creditworthiness.

A year ago, the Consumer Financial Protection Bureau wrote to the heads of the major credit card companies, urging them to make bona fide credit scores available to customers. The agency argued that the scores were more important than ever, since they are used to evaluate applicants not only for credit cards and mortgages but even some for types of insurance and rental apartments.

The consumer agency didn’t mandate the score disclosure, but many lenders got the message.

“Don’t underestimate the influence of the C.F.P.B. on the momentum behind free credit products and services being given to consumers,” said John Ulzheimer, a credit expert with CreditSesame.com.

(There is precedent for offering free FICO scores: The card issuer Providian Financial made FICO scores available to cardholders a decade ago. But the program fizzled after the company was gobbled up by Washington Mutual, whose assets were later acquired by JPMorgan Chase during the financial crisis.)

Jeff Scott, a spokesman for FICO, said participating lenders were making available the actual scores they use to manage their customer accounts. Along with the scores, customers are told the two main factors affecting their given score, such as a history of late payments or a high utilization rate — that is, “maxing out” your cards by using a large proportion of the total credit available to you. That way, consumers can take action to improve their scores. “Customers want to see their FICO scores and want to understand them,” he said.

Since lenders use scores derived from data collected by the various credit bureaus, the score used by your credit card issuer could differ somewhat from the scores used by, say, a bank to make you a home loan. And your FICO score from TransUnion may differ from one provided by Experian or Equifax. Also, Mr. Scott noted, scores may change from month to month, depending on how you manage your credit.

“Consumers should keep in mind that FICO scores are dynamic,” Mr. Scott said.

Here are some questions about FICO scores:

■ What if I don’t do business with one of the lenders making the free scores available?

You are entitled to see your credit score without charge if you apply for a mortgage, if your application for credit is rejected or if your score is used to offer you a less-than-optimum interest rate. (In practice, some lenders make scores available routinely to all applicants.)

You can also pay to buy your score from FICO; the myfico.com website offers a one-time score and credit report for $19.95.

■ What about credit scores from FICO competitors, like VantageScore?

Your score from VantageScore, a model created by the three big credit bureaus that is less widely used than the FICOs, can be obtained free on several websites, including CreditKarma and Quizzle, as part of their no-cost subscription services.

■ Can I obtain a free version of my credit report?

You are entitled to a free copy of your credit report — the data on which your credit score is based — once a year from each of the three big credit bureaus. Make sure to order your report at annualcreditreport.com to avoid sound-alike websites that may charge fees.